With advances in technology, the banking and tech industries have become increasingly interested in the potential of artificial intelligence (AI). JPMorgan Chase, the multinational financial services company, has recently unveiled a new AI model that is capable of tracking stock market movement based on the words of the Federal Reserve. The model, named the Hawk-Dove score, is built around ChatGPT and is meant to assess the sentiment of central banks’ language and determine the impact it could have on the markets.
Joseph Lupton, an economist at the bank, believes the initial results of using this model are encouraging – for example, the tool showed that yields on 1-year government bonds increased as the “hawks” (individuals more inclined to believe in aggressive monetary policy) became more present among Fed speakers between meetings, and that the policy statement had shifted to a hawkish direction. The model continues to be used in the near future and applied to more than 30 central banks.
JPMorgan Chase is an avid user of technology, investing more than $2 billion, and around 300 AI-powered projects are currently in production. These projects are something the CEO, Jamie Dimon, holds in high regard, calling them groundbreaking. This recent push in AI-powered solutions has been led by the ChatGPT tool, which has been integral in the recent launch of this stock market model.
Other tech companies have also taken big steps in incorporating AI in their business strategies. Dropbox recently announced that it would cut its workforce by 16%, and the savings will instead be directed towards the hiring of talent with AI experience.
Despite the significant advances that have been made in this field, the potential risks of AI have been denounced and called for more regulation. Elon Musk, for example – who stepped down from OpenAI’s board of directors – has criticized the development pace of AI. Other notable figures such as John Legend, have voiced their concerns about the implications of AI-generated music.
Therefore, as AI technology continues to capture the attention of both banks and tech companies, responsible usage of this technology will be integral in order to ensure its sustainability and proper development.
